A worker attends to pipes carring shale gas. [File photo]
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A worker attends to pipes carring shale gas. [File photo] |
China's largest oil refinery Sinopec announced Saturday that it has purchased one-third of the equity of Devon Energy Corp's five shale gas assets in the United States for US$2.44 billion.
The five shale gas blocks owned by Devon are located in Niobrara, Mississippian, Ohio Utica Shale, the Michigan Basin and Tuscaloosa Marine Shale, Sinopec said in a statement on its website.
The move is Sinopec's first attempt to enter the oil and gas exploration and development business in the U.S and also considered as part of China's drive to develop clean energy.
Analysts said the acquisition will enable Sinopec to gain from Devon's proficiency in producing oil and gas from shale and other unconventional basins.
Sinopec has made a US$732-million cash payment and will pay the remainder in the form of a drilling carry. The entire US$1.71-billion-carry will be realized by the end of 2014, according to Sinopec's statement.
Drilling carry is an accounting arrangement used in energy joint ventures, which means, in this case, that Sinopec will finance the drilling expenses of Devon during a defined period.